Specialist retail to benefit from big Q1
Chipsworld confident going into new year despite implementation of CVA
The joint MD of retailer Chipsworld has said he is confident of an upturn in the first quarter of 2010 despite his company's implementation of a Company Voluntary Arrangement introduced following increasing financial strain.
The move was a responsible one for the company to take, Don McCabe told GamesIndustry.biz, made primarily because of debts owed to HMRC. However, while he predicts that this Christmas the overall retail market will be flat on last year, he expects the first quarter of next year could be a good one for specialist game retail.
"I am confident on the first quarter of next year," said McCabe. "There are some big games coming out. Bayonetta is a stunning game. Then you've got MAG and Darksiders and Mass Effect 2 - there's a multitude of good ones. There's Aliens Vs Predator. They're what I would call gamers' titles as well, rather than supermarket titles - the Super Marios, those are supermarket titles. Very much family genre, that type of game. High profile, lots of TV ads etc.
"But the first quarter of next year are all gamers' titles, and I don't think they will have the same sort of mass appeal or height of appeal of some of the games released before Christmas. It suits us an awful lot better."
As reported earlier today, Chipsworld Ltd has initiated a CVA that allows the company to better protect itself as well as employees, customers and suppliers and lays out a strict timetable for the repayment of debts.
The move is a "responsible response to the current economic situation" said McCabe, and one that is "measured and proportionate" to where it is in the marketplace currently.
"I think that next year the market's going to improve - the retail landscape will improve. But at the moment there's an awful lot of retailers out there that are fighting and a lot doing turnover at the expense of profit. It's not nice when people like Threshers and Borders go into administration," he added.
"I think there's still a lot of negativity as far as consumers are concerned - they're still paying off debt, they're still keeping their hands in their pockets.
"To enter the CVA we had to show the company was viable going forward. That's one of the tests that has to be done when you enter a CVA; that you're not just staving off the inevitable, that the company has a good chance of survival and the company is profitable going forward.
"It's not suitable for all companies, for one's that aren't likely to come back to profitability in the short to medium term."
Chipsworld Ltd has been in business for almost 25 years. Earlier today the company said in a statement that it intends to "weather the storm" and will do everything in its power to ensure it continues to trade for another 25 years.